Solar Risk
Apple is spending big in a sector not usually associated with the tech giant:
solar power. The company has launched a US$848 million effort to power all
of its operations in California, USA, including a new corporate headquarters,
from renewable energy sources, according to CEO Tim Cook. Partnering
with First Solar to build a 2,900-acre ( 1,174-hectare) photovoltaic (PV) solar
plant in Monterey County, California, he said in a February announcement,
is Apple’s “biggest, boldest and most ambitious project ever.”
The initiative is part of a wave of solar megaprojects working to decrease
the world’s dependence on fossil fuels. But not all initiatives are created
equal. Their risks and benefits depend partly on how they transform sun-
light into power (see “Two Types of Solar Projects” sidebar).
PV projects, which feature the panels most commonly associated with
solar energy, convert sunlight directly into electricity. In contrast, concentrating solar power (CSP) projects use mirrors to reflect sunlight onto a
central steam-powered turbine that produces electricity, much like a traditional power plant. As the sector matures, portfolio leaders must assess the
pros and cons of each approach.
Proving Grounds
The cost of PV modules has fallen rapidly due to falling silicon prices and
manufacturing economies of scale, weakening the market for CSP projects
worldwide. But despite the cost discrepancy, CSP has a major advantage over
PV. “Concentrating solar power can be paired with large-scale energy storage
systems,” says Ryan Ramos, founder and principal consultant at RS2 Energy,
a consultancy in Berkeley, California, USA. That means CSP facilities can
deliver a reliable and consistent power supply even when the sun isn’t shining.
The Ivanpah Solar Electric Generating System is trying to prove CSP proj-
ects can realize benefits at scale. The US$2.2 billion megaproject in Califor-
nia’s Mojave Desert—the largest CSP facility in the world—was completed
in February 2014. More than US$1 billion of its budget came from a U.S.
Department of Energy-backed loan; other project sponsors include NRG and
theEdge
Two Types of Solar Projects
PHOTOVOLTAIC (PV)
PV solar projects convert sunlight directly into
electricity through solar panels made of
semiconductor material.
Advantage: Price of generated power is approaching
price of power from grid
Drawback: Expensive to store generated power
Project examples:
n California Flat Solar Project, Monterey County,
California, USA: US$848 million, 280 megawatts,
slated for completion by end of 2016
n JinkoSolar Holding Co. Ltd. solar farm, Shicheng
County, Jiangxi Province, China: RMB$1.6 billion,
200 megawatts, slated for completion in 2019
CONCENTRATING SOLAR POWER (CSP)
CSP (sometimes called solar thermal) projects use
mirrors to concentrate sunlight to create steam,
which drives turbines for electricity generation.
Advantage: Compatible with large-scale energy storage systems
Drawback: Difficult to finance due to high
upfront costs
Project examples:
n Reliance Power/Rajasthan government CSP project at
Dhirubhai Ambani Solar Park, Rajasthan, India: INR21
billion, 100 megawatts, completed 2014
n Moroccan Agency for Solar Energy/ACWA Power project, Ouarzazate, Morocco: US$1 billion, 160 megawatts (phase one), slated for completion by 2016
A solar farm powers Apple’s data center
in Maiden, North Carolina, USA.
